Michael T. Cartwright has served as Chairman of AAC Holdings, Inc.’s board of directors since 2011 and as its Chief Executive Officer since June 2013. Mr. Cartwright has almost 23 years of experience in the addiction treatment industry.
In 2009, Mr. Cartwright co-founded Performance Revolution, LLC, dba FitRx, a company focused on weight management, and served as its CEO until it merged into Forterus, Inc. in 2011. In 1999, he founded Foundations Recovery Network, LLC, a national alcohol and drug treatment company, and served on its board of directors and as its President and CEO until 2009.
In this 4,589 word interview, exclusively in the Wall Street Transcript, Mr. Cartwright explores the intrinsic value of his firm and it’s near term prospects as a publicly traded company:
“I started in the field in 1993 working in the inner city of Nashville at a place called the Mental Health Cooperative and started out as a case manager primarily working with people with schizophrenia and addiction in the inner city.
And at that time, if you recall, there were a lot of people being deinstitutionalized from psychiatric facilities, hospitals. Are you familiar with the movement in the 1990s to deinstitutionalize a lot of our mentally ill patients across the United States? It happened quite a bit in the 1990s.
…one thing I really noticed — because I myself was misdiagnosed when I was 18 years old and experienced treatment myself — one of the things that I noticed with a lot of patients that had psychosis or were deemed schizophrenic was that they were almost not allowed to go into addiction treatment centers.
In the 1990s, you couldn’t send somebody with schizophrenia to Hazelden or Betty Ford Center. They wouldn’t take them.
So I opened up a place called Foundations in 1995 to really focus on people with schizophrenia and addiction, and we did lots and lots of research on the best ways to help somebody who was severely and persistently mentally ill but who also had an addiction issue…”
Get the complete picture on how Mr. Cartwright built his medical treatment facility chain and the challenges it is facing today in the entire 4,589 word interview, only in the Wall Street Transcript.
Matt Larew is an Analyst who joined William Blair & Company, L.L.C. in September 2012 and primarily focuses on health care delivery companies. In 2018, Institutional Investor named Mr. Larew a Rising Star for the All-America Research Team.
Before receiving an MBA in finance and a Master of Health Administration from the University of Iowa, Mr. Larew completed his undergraduate studies at the University of Notre Dame, where he earned a B.S. in biological sciences.
In this 2,365 word interview, exclusively in the Wall Street Transcript, Mr. Larew sees some clear winners in the sector:
“I think HCA (NYSE:HCA) appears likely to continue to look for consolidation opportunities. The hospital sector in general is much more consolidated, and that’s largely in the hands of many nonprofits.
But in the last year, we’ve seen a number of fairly large-scale mergers among some fairly large hospital operators — like CHI Dignity, Advocate Aurora here in the Midwest. But the hospital sector is a little more consolidated.
On the non-hospital side — think of home health and hospice operators — those are highly fragmented markets, so even the largest operators in the space own less than 5% national market share.
So there is a much larger opportunity there, and we expect names like Amedisys (NASDAQ:AMED), LHC Group (NASDAQ:LHCG) and Encompass Health (NYSE:EHC) to find smaller tuck-in assets that they can add to fill in their national footprint where it makes sense.”
The demographic trends are clear:
“The under-65 population in the U.S. is not growing, it is growing less than 1%, and that is expected to continue, and so the growth outlook for providers is muted compared with the providers that are more specifically focused on the elderly population.
We expect that to continue in the future.”
The government reimbursement specifics are driving much of the economics:
“…An acceleration in shift to Medicare Advantage from Medicare…And the incentives really are different as the patient moves from Medicare, where the government is just reimbursing on a fee-for-service basis, to the Medicare Advantage side, where payers — like UnitedHealth (NYSE:UNH) or Aetna or Humana (NYSE:HUM) — are paid a fixed or capitated amount for a patient and are then responsible for their care and, of course, any costs associated with that care.
So they become highly incentivized to, for example, keep patients out of the hospital, where the average hospital admission for Medicare is $14,000 to $15,000.
And the reason this is important is that you have an opportunity to then leverage non-hospital settings — using the home, using retail settings — to get more touch points with these polychronic, high-cost patients to help drive down their costs and simultaneously improve their health.”
Get the full picture of this important sector by reading the entire 2,365 word interview, only in the Wall Street Transcript.
Eric Mendelsohn is the President and Chief Executive Officer of National Health Investors, Inc. He has more than 20 years of health care real estate and financing experience.
Previously, Mr. Mendelsohn was with Emeritus Senior Living for nine years, most recently as a Senior Vice President of Corporate Development, where he was responsible for the financing and acquisition of assisted living properties, home health care companies and executing corporate finance strategies.
Prior to Emeritus, Mr. Mendelsohn was with the University of Washington as a transaction officer, where he worked on the development, acquisition and financing of research, clinic and medical properties. Prior to that, he was a practicing transaction attorney, representing lenders and landlords.
In this 2,213 word interview, exclusively in the Wall Street Transcript, Mr. Mendelsohn details how to create a successful medical real estate business.
“We currently have over 240 properties, and as I said, most of them are in senior housing. We try to curate our mix, if you will, but being a REIT is a very opportunistic business. You have to play the cards that you’re dealt, and the types of deals that you want to do are not always available or not always available at a price that makes sense for your cost of capital.
We try very hard to make all of our acquisitions accretive. There is a school of thought where an acquisition doesn’t need to be accretive in the beginning and that you’ll get a return through property appreciation.
Some REITs are exploring that as a business model, but we are very conservative with our investment philosophy and believe that we should only pay a price that allows us to make money year one based on our cost of capital.
The second part of your question, if I had to pick a property type that I could focus on, I would really like to explore owning more behavioral health.”
Read the entire 2,213 word interview and get the full disclosure from this successful dividend payer.
John Dorfman is Chairman of Dorfman Value Investments LLC, which he founded in 1999. He is a hands-on money manager with over four decades of financial industry experience. He has managed a mutual fund, a hedge fund and more than 100 individual accounts, and has also been a financial writer for many years.
He has been a senior special writer for The Wall Street Journal, associate editor of Forbes and a columnist for Bloomberg. His syndicated column appears in Forbes.com, GuruFocus.com and newspapers nationwide.
Earlier, he worked at Dreman Value Management.
In this 3,710 word interview, this experienced portfolio manager identifies the stocks he thinks will outperform over the next few years:
“People have felt that live sports are one of the last things that people watch live and that this is good for advertisers. So advertisers have been drawn in that direction, but even sports aren’t immune to people’s desire to watch at an hour that’s convenient for them.
I do think there will be some migration of even sports content to streaming. And considering that it’s selling for well-below the market multiple, which is around 22, and Disney is, as I said, around 16 times trailing earnings, it’s very profitable.
The return on equity in the latest four quarters was 24%.
So this is a first-class company, and we love to buy on bad news that we regard as real but temporary, and I think that Disney’s problems are not transitory.
They aren’t going away, but I think they’re exaggerated, and I think that its competitive position in TV entertainment is going to improve.
Plus, they remain just a powerhouse in theme parks and in movie production. So that’s why I’m very partial to that stock right now.”
Get all the top Dorfman picks and more by reading the entire this 3,710 word interview, only in the Wall Street Transcript.
Brandon M. Nelson, Senior Portfolio Manager, is responsible for the portfolio management of Calamos Investments LLC’s small- and smid-cap growth strategies.
He draws upon more than 22 years of experience in small- and smid-cap growth equity investing, utilizing the same philosophy and process employed by Calamos Timpani Small Cap Growth Fund (MUTF:CTSIX) today.
He is also a member of the Calamos investment committee, which is charged with providing a top-down framework, maintaining oversight of risk and performance metrics, and evaluating investment process.
Mr. Nelson joined Calamos Investments following its 2019 acquisition of Timpani Capital Management, the company he co-founded in 2008, where he served as Chief Investment Officer and Portfolio Manager of the Timpani strategies since inception. Previously, he was a Managing Director and Senior Portfolio Manager at Wells Capital Management since 2005.
In this wide ranging 4,398 word interview, Mr. Nelson reveals his investing methods and the reasoning behind several of his current top picks.
“Our philosophy is to invest in companies with fundamental momentum. We seek companies with a sustainable and underestimated growth profile, and then, we overlay that approach with an unemotional, value-added sell discipline.
And the key is to find companies that have both sustainable growth and underestimated growth. One without the other can be OK, but both together tend to be much more powerful because valuation metrics usually expand when this happens.
To elaborate a little bit more, if you don’t mind, part of the reason why I think the process is successful and repeatable is because we’re exploiting some common behavioral errors that other investors and analysts make.”
This discipline leads to several sell signals for the portfolio.
“We sold a stock called Green Dot Corp. (NYSE:GDOT). We were seeing fatigue. We sold this in the March quarter; our average sale price was around $69. I think it’s a good example of a stock that we owned for a couple of years. It was in beat-and-raise mode for most of those quarters.
They were consistently showing strong growth, actually accelerating growth. For several quarters, they were exceeding analyst expectations, and the stock was a great performer for that year and a half to two years.
Beginning in the December quarter, we started to see fatigue show up in the fundamentals. ”
Get more insight into owning winners that Mr. Nelson has identified by reading the entire 4,398 word interview, only in the Wall Street Transcript.
Stephen S. Smith founded Smith Group Asset Management, a Dallas-based investment management organization, in 1995, and serves as the company’s CEO and Chairman of the investment committee.
He began his career in the late 1960s as an engineer with NASA in the lunar landing program. Mr. Smith joined Wachovia Bank as a computer systems analyst in the mid-1970s and transitioned to the bank’s investment management division in order to help design and implement a portfolio management system.
He left Wachovia and joined what is now known as Bank of America in 1983. Mr. Smith held a number of senior investment positions at Bank of America until he departed in 1995 to found Smith Group.
In this 3,625 word interview, exclusively in the Wall Street Transcript, Mr. Smith details his portfolio management methodology and top picks for 2019.
“Right now, we have seven portfolio managers; I’ve personally been involved in hiring all of them, and the qualities that I look for in identifying portfolio managers are, number one, they have to think like an engineer.
They have to be problem-solvers. It doesn’t mean they have to have an engineering degree, but they must think like an engineer, know how to use a scientific method to identify and solve problems.
The second thing I require is that the members of our portfolio management team have to have the proper training in order to be able to analyze the companies that will go into the portfolio and the right kind of training to manage the risk of our portfolios.
The Chartered Financial Analyst, or CFA, program is very good at training us to do that; I got my CFA charter back in 1981, and I require every member of the portfolio management team to either have the CFA charter or have a CPA, and that’s a requirement of all seven of us.
And the last thing that I require is that the members of the team must be team players.”
The team is currently cautious on high value, large cap tech stocks:
“I’ve had a long enough career that I saw a moat around Polaroid and IBM (NYSE:IBM) and Eastman Kodak(NYSE:KODK); they had dominant positions in their industry until they didn’t, and then when they didn’t, they had a long downward slide.
So although we do own Facebook (NASDAQ:FB), and we own Google (NASDAQ:GOOG), we don’t own them at the level that the benchmarks do.
And it does appear that some of the FAANGs, especially Amazon with valuation levels that are off the charts, seem to be pricing in expectations that are way better than they could ever achieve.
So we like bread-and-butter technology, consumer discretionary and are especially concerned by the megacap technology companies that dominate the growth benchmarks.”
Get the complete list of the stocks that make this cut by reading the entire 3,625 word interview, exclusively in the Wall Street Transcript.
Joel D. Hirsh, CFA, is a Principal, Portfolio Manager and Co-Chief Investment Officer at Kovitz Investment Group. He is responsible for leading the firm’s equity research process as well as developing portfolio construction for KIG’s Core Equity and Hedged Equity strategies. Kovitz subadvises Absolute Capital Opportunities Fund (MUTF:CAPOX) for which Mr. Hirsh is a co-portfolio manager.
In this 3,279 word interview exclusively with the Wall Street Transcript, this highly successful portfolio manager reveals the reasoning behind his top picks:
“What’s interesting about Quanta is they grew mostly through M&A to be of a size that they are significantly better positioned than the companies they compete with. And as the company has evolved, they’re pretty well misunderstood.
They had a couple of years where earnings were not smooth because large transmission projects got delayed for regulatory purposes, but the base business continued to grow very nicely. And at this point, we estimate that 80% of their earnings is base business, and that is a very high-quality recurring type of business.”
The portfolio manager identifies other stocks with the same potential to out-perform the market in the near term and the far term:
“They’re about double the size of Expedia (NASDAQ:EXPE). And it’s really an oligopoly between Booking and Expedia.
And they’ve been a very rational oligopoly in terms of competing for traffic. They primarily distinguish themselves by the number of rooms available, the number of alternative accommodations available and the ease of use of their app and online presence.
And so in our opinion, once you’re getting about half of your traffic organically, you’ve definitely arrived, and Booking definitely has. They’re generally considered by a wide margin the best operator in the space.”
Get the complete picture on these and other stocks in the portfolio by reading the entire 3,279 word interview exclusively with the Wall Street Transcript.
Ryan McIntyre, CFA, is a Portfolio Manager at Tocqueville Asset Management L.P. He serves as a Co-Portfolio Manager of the Tocqueville Gold Strategy as well as the Tocqueville Gold Fund. Additionally, he holds research responsibilities for other commodity-related investments.
He joined Tocqueville in 2008 and focuses on generating ideas and monitoring investments related to precious metals.
Prior to joining Tocqueville, Mr. McIntyre was an analyst and then associate focused on mergers and acquisitions in the metals and mining sector with Macquarie Bank.
Douglas B. Groh is a Portfolio Manager at Tocqueville Asset Management L.P. He joined Tocqueville in 2003, where he is a Co-Portfolio Manager of the Tocqueville Gold Fund.
Prior to joining Tocqueville, Mr. Groh was Director of Investment Research at Grove Capital from 2001 to 2003 and from 1990 to 2001 held investment research and banking positions at J.P. Morgan, Merrill Lynch and ING Bank.
Mr. Groh began his career as a mining and precious metals analyst in 1985 at U.S. Global Investors.
In this 4,312 word interview, these two veteran gold investors explore where the top value is currently to be found in this interesting investment sector. Their analysis of several specific stocks is buttressed by an experienced valuation methodology:
“In the gold sector, numerous small companies are engaged just in exploration and resource discovery as their primary focus.
Their value proposition is identifying and discovering new gold deposits and then advancing the development of those deposits to a point where the economics of the resource justifies further advancement toward a construction and production decision.
The value-creating proposition for those companies is the discovery of new metal resources.
Then, there’s the segment of the sector where companies are focused primarily on developing those discoveries that might have been made by other companies.
As those properties/projects are advanced and de-risked, the market tends to assign a higher value to those assets as milestones are reached.
And then finally, there are those companies that are operators and that produce precious metals and generate cash flow on a regular basis.
The reason I break out the precious metals mining sector into segments is because it’s very important for investors to recognize that those different segments of the market require a different analytical approach.
The explorers, the discovers, they’re identifying the economic value and geologic potential of the properties they are exploring/developing. So the analysis is really more of a geologic analysis and assessing the potential of the geology and related property.
That compares to the developers who are building mines. For them, the analysis is assessing the project’s economics in terms of its risks/returns and what the project’s sensitivities are, as well as looking at the project’s progress and the risks in terms of building that project.
For the larger companies, the operators and the producers, the analysis is more of a traditional security analysis and investment analysis approach, where there’s ongoing cash flow, there’s an established balance sheet, there’s an ongoing operation.
One uses the typical security analysis that is used to look at any other company: What’s their cash flow like, and what is the quality of that cash flow? What’s their balance sheet like? What’s their future look like in terms of the proposition that they’re presenting to investors?”
One example of a stock the pair of investors discuss is located in Nevada:
“We got involved in Corvus when it was spun out of another company at about C$0.80 per share, and there were fewer shares outstanding at the time, giving it a market cap at the time of about C$35 million.
The market cap has gone from roughly, say, C$35 million to C$235 million, so almost a sevenfold increase, while shares outstanding have increased only about 2.7 times as they financed their activities.”
Get the complete detail by reading the entire 4,312 word interview with these two veteran gold investment professionals, only in the Wall Street Transcript.
Brandon M. Nelson, Senior Portfolio Manager, is responsible for the portfolio management of Calamos Investments LLC’s small- and smid-cap growth strategies. He draws upon more than 22 years of experience in small- and smid-cap growth equity investing, utilizing the same philosophy and process employed by Calamos Timpani Small Cap Growth Fund (MUTF:CTSIX) today.
He is also a member of the Calamos investment committee, which is charged with providing a top-down framework, maintaining oversight of risk and performance metrics, and evaluating investment process.
Mr. Nelson joined Calamos Investments following its 2019 acquisition of Timpani Capital Management, the company he co-founded in 2008, where he served as Chief Investment Officer and Portfolio Manager of the Timpani strategies since inception.
In his 4,398 word interview, exclusively in the Wall Street Transcript, Mr. Nelson describes one of his current top portfolio picks:
“I was just talking about gunfire detection; the stock I was referring to specifically is called ShotSpotter(NASDAQ:SSTI), and it’s a good example of a stock that has scored pretty well with how we think. It’s grown rapidly in recent quarters, and it’s generally exceeded analyst expectations. Like I said before, they sell gunfire detection technology, mostly to police departments throughout the United States.
As it turns out, about 80% of gunfire goes unreported. Police departments can use ShotSpotter’s technology to accurately identify the location of gunfire and, like I said, proactively send officers to the scene to try to resolve situations that might be hostile or to gather evidence and really just to show the community they’ve got their back and that they’re present.
It really helps with community relations.
If you think about our two key criteria — sustainable growth and underestimated growth — one thing we like about ShotSpotter is it’s being sold in about 100 U.S. cities today, but in theory, it could be used in closer to 1,500 U.S. cities.
That’s a lot of runway for them to have a sustainable growth profile, and so that’s very attractive to us. We want to find stocks where there’s a sort of open-ended situation like that where they can, at least theoretically, grow for many years going forward.”
Get more top picks from Mr. Nelson, as well as his detailed methodology, exclusively in his 4,398 word interview in the Wall Street Transcript.
Todd Denkin is Founder, Chairman, CEO and President of Digipath, Inc. Since joining Digipath, Inc. in 2014, Mr. Denkin moved the company from a pure digital pathology solution provider into a leader in the medical and recreational cannabis testing market.
Digipath Labs’ Las Vegas cannabis testing facility is the number-one testing lab in Nevada. It has been operating since May 2015 and seen a steady increase in clients and revenues.
While maintaining the highest standard for cannabis testing, Mr. Denkin also focuses on expanding the business through licensing agreements and partnerships. This brings the reliability, experience and customer service Digipath Labs is known for to cannabis markets across the country.
Mr. Denkin’s career has been defined by foresight — the ability to spot and take advantage of emerging market trends and navigate new companies into lucrative markets.
In this 3,926 word interview, exclusively with the Wall Street Transcript, Mr. Denkin reveals the strategy for this supplier to the cannabis industry.
“Thanks to the use of recreational cannabis being legally allowed here in Nevada two years ago now, the market has expanded tremendously.
They just released numbers for March of this year, and it was a $59 million month and $11 million more than it was the previous month, and that was all based on recreational cannabis. In fact, the medical numbers are down about $800,000 for the month, but Nevada is spending $1.9 million a day on cannabis products.
It is growing at a rate of about 20% per year. That has definitely increased our sample flow.
There have been expansions done with various cultivators and producers and lots of merging. Lots of big companies are coming into Las Vegas and spending millions and millions of dollars to buy up cultivations, productions and dispensaries.
Everybody is expanding, and everybody wants to service the demand for cannabis products in Nevada.”
“The chief competition is really the 11 other labs that I compete with for samples. How we distinguish ourselves is really through the work of our Chief Science Officer, Dr. Cindy Orser.
She is a big brain in this industry, and she has made lots of discoveries.
She is a serious scientist with 30 years of experience both academically and at the bench.
We offer a 72-hour turnaround time, which is crucial for most producers. A lot of the other labs take five to 10 days to return results, but we think it is very important to get those results back to the customer as soon as possible. We have a very high-capacity lab. We use all Agilent equipment, and that allows us to really keep sample flow going. We can take on really any job necessary.”
Get the complete detail on this company and its prospects, only in this 3,926 word interview, exclusively with the Wall Street Transcript,
